84 Neb. 110 | Neb. | 1909
Action by the plaintiff on three policies of insurance issued by the defendant. Judgment for the plaintiff, and defendant appeals.
The facts are practically undisputed. One Frank 'Langloss was the owner of a restaurant in the town of Wilcox, and procured two of the policies in question upon his stock and fixtures. He sold his business to Long & Jackson, and assigned to them the two policies. Long & Jackson took out a third policy upon the stock and fixtures, and after-wards sold the business to Hall & Hartley, to whom the three policies were transferred. One Charles W. Lam-born, residing at Wilcox, was a recording agent for the defendant company, and issued these three policies and approved the several transfers made. When Hall & Hartley purchased the restaurant, they borrowed $667.95 from the plaintiff bank and executed a bill of sale upon all the property covered by the insurance as security therefor. This was about the middle of May, 1906. The insured property was destroyed by fire July 18,1906. It is alleged in the plaintiff’s petition that the three policies of insurance were verbally assigned to the bank as additional security for the loan made at the date of said loan. Lam-born, the agent of defendant company, was also assistant cashier of the plaintiff bank, and it quite clearly appears that the policies were left either in his possession or in the possession of the bank from the time of their issue. About the 20th of July one Lynde, an adjuster for the defendant, visited Wilcox for the purpose of securing information concerning the loss, and called upon Lamborn, who, as
It is conceded that the defendant company had no actual notice of the bill of sale made by Hall & Hartley to the bank until after the fire, and the principal dispute arises upon the effect that should be given to the knowledge of Lamborn, the agent of the defendant company, and who, at the same time, was the assistant cashier of the bank. The plaintiff asserts that knowledge of the agent, who, it is conceded, was present when the bill of
As a general rule the knowledge of an agent is imputed to his principal. In Kennedy v. Green, 3 Myl. & K. (Eng.) *699, Lord Brougham gave as a reason for the rule “that policy, and the safety of the public, forbids a person to deny knowledge while he is so dealing as to keep himself ignorant, * * * and yet all the while let his agent know, and himself, perhaps, profit by that knowledge.” The same reason, framed in different language, is given by Church, C. J., in National Life Ins., Co. v. Minch, 53 N. Y. 144: “The rule which charges the principal with what the agent knows is for the protection of innocent third persons.” Like most other legal rules, this one has its exceptions, and one of the exceptions is that a corporation is not chargeable with the knowledge nor bound by the acts of one of its officers in a matter in which he acts in behalf of his own interest, and deals with the corporation as a private individual, and in no way representing it in the transaction. Koehler v. Dodge, 31 Neb. 328; Buffalo County Nat. Bank v. Sharpe, 40 Neb. 123. Another exception to the rule is recognized in Houghton & Co. v. Todd,, 58 Neb. 360, where it is said: “The rule whereby an agent’s knowledge is imputed to his principal is subject to an exception in the case.of an agent who is engaged in an independent fraudulent scheme without the scope of the agency.” We think it may be regarded as well established that where an agent’s duty to his principal is opposed to or even remotely conflicts with his own interest, or the interest of another party for whom he acts, the law will not permit him to act, nor will it hold his acts or his knowledge gained in such transaction obligatory upon his principal. That the execution of the bill of sale rendered void
In this condition of the case it is evident that unless the knowledge of Lamborn may be imputed to the company, and a waiver of the conditions of the policies implied from such knowledge, then the plaintiff’s action must fail. The bank must be charged with knowledge of the conditions of the policies prohibiting a transfer of title of the property insured. It knew that in accepting the bill of sale the policies were made void, unless the company was notified and consented thereto. It was the duty of the bank to inform the company that it was about to take this security and to obtain its assent. To keep ‘secret the proceeding and to attempt to collect the policies would be a fraud upon the company. A like duty was cast upon Lamborn, the agent of the company, but it appears that the adverse interest cast upon him as an officer of the bank kept him silent, and that same adverse interest creates an exception in the application, of the general rule of law imputing knowledge and notice of the agent to his principal. We do not wish to be understood as charging either the bank or Lamborn with, a scheme to defraud the insurance company. At the time of taking this bill of sale it is proba*ble that no thought of the consequences arose in the minds of the officers acting for the bank, and yet it was a moral fraud upon the company to take security upon property insured, without the consent of the defendant company first obtained. The result is that, under the circumstances, the knowledge of Lamborn cannot, under all the authorities, be imputed to the defendant company, as his position as an officer of the bank rendered his interest in the transaction adverse to the insurance company.
We recommend a reversal of the judgment and remand
By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
Reversed.